Taiwan’s state energy firm to start building third LNG terminal

Taiwan’s state energy firm CPC expects to start building its third liquefied natural gas (LNG) import terminal by mid-2019, once it obtains all the required permits, according to a senior company official.

The proposed terminal, at Taoyuan, northwestern Taiwan, could start operations in early 2023 with an initial capacity of 1 million tons per year (tpy), Jane Liao, chief executive of CPC’s LNG business said on the sidelines of the CERAWeek conference in Houston.

The project’s first phase of 3 MMtpy will be used by state utility Taipower, she said.

Taiwan is the world’s fifth largest LNG importer with an import volume of 16.8 MMtpy in 2018. The island is boosting its LNG imports as it phases out nuclear and coal to generate electricity in the next decade.

Taiwan aims to have LNG import capability of 10 MMtpy each in the country’s north, central and south by 2027, Liao said, adding that CPC will continue to expand existing terminals at Taichung and Yung-An in Kaohsiung, southern Taiwan.

CPC is currently the only LNG importer in Taiwan and has long-term supplies from Australia, Qatar, Papua New Guinea and Malaysia. To diversify supplies, the company will start receiving LNG from the United States in 2021 after CPC inked a 25-year deal with Cheniere Energy last year.

The company prefers long-term contracts, although spot cargoes accounted for about 15 percent of its annual imports, Liao said.

CPC is also eyeing new supplies from Russia’s Sakhalin island in the Pacific, or the U.S. state of Alaska and may seek joint purchases with other buyers from Japan and South Korea, Liao said.

“We’ve been waiting for Sakhalin,” Liao said, adding that the project would be ideal to supply north Asian buyers because of its proximity, while LNG shipments from Alaska to Taiwan will avoid potential congestion at the Panama Canal.

The global LNG industry is becoming increasingly interconnected as grassroots export projects get off the ground. Another technology route for processing gas into fuels—GTL—is attracting renewed attention due to improving economics. Small-scale solutions for both LNG and GTL are at the forefront of new technological developments, while major projects using more conventional technologies continue to start up around the world.